Nation A is a small but wealthy nation. The benevolent government
worries about unemployment amongst the nation’s youth. The government realises
SME’s are the key to creating employment as in all other nations they are the greater
creator of jobs and the greater contributor to GDP than the large corporations.
The government have a whole array of SME friendly policies to boost its SME
sector. The results are not encouraging as only a small number of SME’s seems
to be benefitting from these SME boosting policies. Those in the know, knows
this is because of the reluctance of everyone to move from the platform of debt
to the platform of equity in helping the SME’s. The debt banking grip on
everyone’s mind is so strong from 300 years of riba brainwashing that nobody
considers the possibility of equity investing in SME’s as a solution. The
bank’s excuse of not having enough staff to monitor investments in SME’s is
taken as gospel and never challenged again whether it cannot really be done
with little additional human resource cost to everyone. However that is
not what this article is all about and I will not explain or preach to those
who refuse to open their minds.
Actually the proposed new name for this blessed nation is
Brunei Darul Dzikr in line with the aspirations of a truly inspired King.
Consummate obedience to Allah the Almighty is the only way to describe the
outstanding bold decision of the Sultan of Brunei to insist his nation be
govern by the laws of Allah swt true to the demands of the Quran.
Surah AlMaidah Ayah 48 translates :
“And We have
revealed to you, [O Muhammad], the Book in truth, confirming that which
preceded it of the Scripture and as a criterion over it. So judge between them
by what Allah has revealed and do not follow their inclinations away from what
has come to you of the truth. To each of you We prescribed a law and a method.
Had Allah willed, He would have made you one nation [united in religion], but
[He intended] to test you in what He has given you; so race to [all that is]
good. To Allah is your return all together, and He will [then] inform you
concerning that over which you used to differ.”
Coming back from the World Islamic Economic Forum in London,
and hearing the impassioned speech by UK Prime Minister David Cameron on the
virtues of Islamic Finance and the intention of his Government to pursue
Islamic Finance with vigour so much so as to turn London into a Centre of
Islamic Finance on par with Kuala Lumpur and Dubai, I was equally bowled over
by the import and thrust of your article below. With over 22 years involvement in
Islamic Finance I do have a little vested interest in seeing it expand.
Expansion of Islamic finance means the expansion of the
ideals of fairness and justice in this world. This is where I do not know how
to begin to describe my feelings. Pride over its international recognition is
tinged with a certain guilt and fear that the current form of Islamic finance
as practised in the Muslim world today may not live up to expectations when it comes
to the crunch. Let me take the bull by the horn and come up with an explanation
of Islamic finance early in my piece so that we are all on the same page.
Islamic finance is basically broadly divided into two category, Islamic debt
financing and Islamic equity financing. What we have observed in the
development of Islamic finance in the world today is the monopoly of Islamic
debt finance to almost the total exclusion of Islamic equity finance. Many of
us believe the true alternative to Western conventional finance is Islamic
Equity Finance and not Islamic Debt Finance. Debt by whatever name is unjust
when used to finance risk projects that demand sharing of risks by all parties.
Islamic debt finance to finance projects that demands risk capital will be
equally unjust to project owners who defaults for business reasons totally out
of their control. This is where my mixed feelings earlier came from. Is Islamic
finance going to be any different if it is solely based on debt?
Another issue Gillian, is that we cannot discuss finance
ignoring the surrounding issues that determines the shape of finance. These
issues principally revolves around fraudulent money creation, fractional
reserve banking and legitimacy of fiat money as an article of faith in the
economy. When we play the board game of Monopoly, inflation is never an issue
right, the price of that Mayfair or Park Lane Property never goes up right? Why
is that? That’s because we know the bank have a fixed volume of money. Now
imagine a game of monopoly where the bank is at liberty to increase the volume
of money at its whims and fancy. We will soon find the price of properties being
on a permanent upward trend right? In the real world when the volume of money
can be increased at someone’s whim and fancy then those on low and fixed wages
will suffer will they not? The volume of good and services cannot keep pace
with voluminous and callous increase in volume of money.
Who is this someone in a nation who can increase the volume
of money at his whim and fancy? If our answer is the government then we will
get 10 marks, for on average the government through paper notes and coins
produce only 10% ofa nation’s money
supply. If we answer banks then we will get 90 marks because on average banks
create 90% of a nation’s money supply through what is called fractional reserve
banking. The USD1000 you place in a bank’s current account and is given a cheque book
to spend? Very soon the banks will lend the same USD1000, at reducing amount of
course because of the reserve at Central bank requirement, such that at the end
of the day 25 people will hold cheque books believing they hold various
reducing portions of the original USD1000 you deposited. This is David
Copperfield stuff, where banks create money out of thin air. Mathematically,
with a 2% reserve requirement, a USD1000 deposit can result in thin air money
of USD25000; and a USD1billion deposit can result in USD 25billion of money
created by banks out of thin air.
Why am I describing this obviously fraudulent money creation
system? Because an Islamic bank that operates in this system is also guilty of
creating money out of thin air. Whither fairness and justice to the world when
one is equally guilty of fraudulent money creation? Why do I call it
fraudulent? You remember that game of monopoly I described above where the bank
is now allowed to create as much money as it wishes? What if the banker choose
to lend the newly created money only to his friends and which they use to buy
up all properties, will not these select group of friends become very rich, and
society then pays for their wealth through inflation when volume of goods and
services increases do not match the volume of money increases. This process of
enriching the rich and impoverishing the poor is implicit in the debt based
banking system when monies are lent by banks only to monied people with
collateral. So Gillian, an Islamic bank caught in a fractional reserve banking
and Islamic debt banking system is also guilty of enriching the rich and
impoverishing the poor. So whither fairness and justice to the world?
The overriding Islamic legal maxim in Muamalat or Islamic economic matters is
AlGhunm bi AlGhurm i.e rewards comes only with risk. Only when Islamic banks
practise this; only when they favour equity finance in place of debt, only when
risk is not a four letter word to them, will they be the true saviour the world
awaits.
Seven long years ago, I had a chance to meet Sheikh
Muhammad Taqi Usmani, a Pakistani scholar who is also a leading expert in
Islamic finance. It was an unexpectedly memorable conversation. Back then,
during the height of the credit bubble, there were very few people who
expressed strong criticisms of how western finance worked. But Usmani was
scathing. Most notably, he bewailed the tendency of American and European banks
to create money untethered from any real assets; or, as he put it, to spin
“derivatives out of more derivatives”. Indeed, to Usmani it seemed as if
western finance was almost akin to a giant ball of candyfloss: a bubble of
sticky froth, from which a few “real” assets or economic activities had been
spun and re-spun to support numerous ephemeral financial deals, much in the way
a tiny piece of sugar can be used to concoct a giant puffball. “Western banks
create money from money,” Usmani told me, contrasting this with the world of
Islamic finance, where “money is always backed by assets” and relies on “equity
financing not debt”.
Today, such criticisms no longer look quite radical – or
unusual. On the contrary, following the collapse of the credit bubble even men
such as Alan Greenspan, the former
chairman of the Federal Reserve, are fretting about the inexorable expansion of
western finance. And, if you listen to American Tea Party activists discussing
the tottering piles of American debt and exploding money supply, their concerns
(ironically) sound rather similar to those of Usmani.
In the past few days I have had reason to ponder Usmani’s
words again. Late last month, George Osborne, the British chancellor, announced
that the UK government plans to issue its first “Islamic bond”, or a debt
instrument that complies with Islamic principles. The news has provoked
cynicism in some City quarters, since it seems something of a diplomatic ploy.
But, to my mind, this partly misses the point. For whatever Osborne’s motives,
one benefit in having a British Islamic bond in play is that it might prod more
people to glance at the principles behind Islamic finance. And those ideas are
thought-provoking, for Muslim and non-Muslim alike, since they present a vision
of money that is refreshingly different from the ideas that 21st-century
western financiers and consumers take for granted.
What are these core principles? The central issue is a
belief that usury is morally and religiously wrong (haram). In that sense,
then, Islamic scholars echo the precepts of the medieval Christian church.
Observant Muslims are not supposed to make or receive loans with any interest.
But another crucial point is that debt as a whole is discouraged: Islamic
finance prefers to finance business and government via investors who share
risks, ie with equity.
And Islamic scholars hate the idea of using money to make
more money, as a game in itself. Instead, they believe that financial flows
should be tethered to tangible productive enterprises or trade, since money
should serve the “real” economy. This is very different from the embedded ideas
of 21st-century western finance or banking in previous centuries.
In the 20th century, some Islamic financiers started to
build financial structures that complied with these ideas (say, by creating
risk-taking “banks”). And, ironically, these days western banks such as
Deutsche Bank, Citigroup and HSBC have now jumped into the fray too, borrowing
modern western financial innovations, such as securitisation, to dance around
Islamic strictures.
Some of this activity looks contradictory, if not comical:
like the church of medieval Europe, there is a whiff of hypocrisy and religious
arbitrage. But notwithstanding that, the fact remains that the core principles
– if not all the practice – are fascinating. After all, the idea of tethering
our financial system more closely to the “real” economy and tangible,
productive enterprises seems distinctly appealing these days. Likewise building
a system around equity, not debt, with a less financial candyfloss. Indeed,
perhaps the really curious issue here is not that Islamic scholars are
promoting those ideas but that other religious groups have not been trumpeting
them on moral grounds too. Yes, the new Archbishop of Canterbury has appealed
for bankers to behave in a more moral way but why didn’t the Church criticise
western finance more loudly before 2007? Why is nobody demanding Christian
bonds to support infrastructure spending, say?
It would be an intriguing question to ask when, or if,
those Islamic British bonds ever appear. Finance might just possibly be one
area where religions could learn from each other.
We
can understand if the non-Muslims are lost as to what happened and no not how to solve the problem. But for Muslims to be not aware of the solutions is just
amazing! What the article described is what will happen to an economy
where Quranic tenets are not observed. This is the reason why Allah and
His Rasul declared war on riba 1400 years ago. This is what will happen
when you allow riba to breed to its ugliest permutation. A riba driven
economy makes the rich richer and the poor poorer. Money which is not
pegged against gold or GDP and not monitored by an International Hisbah
organisation will breed legalised theft by the chosen
international reserve currency. In local economies fractional reserve
banking is the local riba dragon that ravages the poor. In the
international scene interest based international loans ala economic hitmen style
ravages poor countries. In every nation a combination of the interest and debt based banking system, fractional reserve banking and money creation not
pegged against specie combine to wreck havoc on the poor. Where do we begin, how do we begin to make people understand.................
Kitabolehmemahamisekiranya orang bukan Islam ketandusan fikiran bagaimana ini boleh berlaku dan
apakah penyelesaiannya. Tetapi sungguh menakjubkan sekiranya orang
Islam sendiri tidak nampak penyelesaiannya! Apa yang artikel ini gambarkan
ialah apa yang akan berlaku kepada ekonomi dunia sekiranya tuntutan AlQuran diketepikan.
Inilah sebabnya Allah dan RasulNya istihar perang terhadap pengamal riba 1400
dahulu. Inilah apa yang akan berlaku sekiranya kita benarkan riba berleluasa
dan membiak tanpa diawasi. Ekonomi yang dikemudi riba akan mengkayakan yang
kaya dan mengkedanakan yang miskin. Wang yang tidak disandarkan kepada emas
atau KDNK dan dipantau oleh Persatuan Hisbah Antarabangsa akan membenar mata wang
yang merupakan mata wang rizab antarabangsa melanun tanpa batasan. Diekonomi
peringkat negara pula perbankan rizab pecahan menjadi perompak orang miskin. Diekonomi
peringkat antarabangsa pinjaman riba ala pembunuh ekonomi upahan menjadi
perompak negara miskin.Disetiap negara pakatan jahat perbankan rizab pecahan,
sistem perbankan riba dan hutang, dan wang yang tidak bersandarkan ‘ain akan
bekerjasama untuk mencuri dari yang miskin.
Bagaimanakah dapat
kita memberi faham kepada ummah......
Excerpt from the book
called 13 Bankers by Johnson and Kwak /Petikan dari buku yang dipanggil 13
Bankers oleh Johnson dan Kwak
·“The failure to regulate not only derivatives,
but many other financial innovations, made possible a decade long financial
frenzy that ultimately created the worst financial crisis and deepest recession
the world has endured since World War II.”
Comment
This is
what happens when finance is not governed by Shariah.
·“Derivatives grew to over USD680 trillion in
face value and Credit Default Swaps grew to over USD50 trillion by 2008
contributing to the inflation of the housing bubble. When that bubble burst,
the collapse in the value of securities based on the US housing market
triggered the financial crisis. US and other governments bailed out their
banking sectors with rescue packages worth hundred of trillions of dollars.”
Comment
These
bail outs are by creation of fiat money out of thin air which is fraudulent and
a thievery of the ordinary man’s purchasing power
Apa dah jadi? Bergabunglah tenaga professional Islamik
dengan barisan ulama demi kemajuan Islam. Sedarlah bahawa British telah
sekularkan kita. Barisan ulama perlu ketangkasan tenaga professional Islamik;
dan tenaga professional Islamik perlu bimbingan barisan ulama. Bacalah tulisan
tulisan cendiakawan saperti Prof Syed Naguib AlAttas (Islam dan Sekularisma)
untuk memahami hakikat sekularisma bangsa Melayu khasnya dan umat Islam amnya
oleh Barat. Kita wajib bergabung sehingga sistem pendidikkan kita mampu wujud
insan kamil yang syumul ilmunya berkemampuan menguasai kedua -dua dunia dan
akhirat. Bukankah begitu banyak contoh dalam sejarah Islam dimana
pemimpin-pemimpin agung Islam rela berundur diri demi kesatuan dan maslahah
Islam?
Muslim Brotherhood leader
Mohamed al-Beltagy wrote a letter to his daughter Esmaa killed on Wednesday by
snipers in Rabaa al-Adawiya
Muslim Brotherhood leader Mohamed al-Beltagy
wrote a letter
to his daughter
Esmaaal-Beltagy
killed on Wednesday by snipers at the sit-in at Rabaa al-Adawiya.
The letter
published on the social media account of al Beltagy expressing his feeling to
his daughter reads as follow:
"My dear daughter and invaluable teacher…
I don’t bid adieu to you conversely I say “see you tomorrow”.
So sad for Misr, so sad for Sham, so sad for Gaza.
Your death is our death, Your misery is our misery, Your hardship is our pain, Oh Allah please save our brothers and sisters who are facing such brutal treachery Surely You are the Defender of the oppressed. Surely You answer the du’a of the oppressed
Oh Allah grant taufiq and hidayah to our leaders so that they understand the bigger battle they have to plan and fight.
Sedih untuk Misr, sedih untuk Sham, sedih untuk Gaza.
Kematian mu adalah kematian kami, Kesengsaraan mu adalah kesengsaraan kami, Keperitan mu adalah keperitan kami, Ya Allah kau peliharalah saudara-saudara kami yang sedang mengharungi kezaliman Sesungguhnya kau pembela orang-orang yang teraniaya. Sesungguhnya kau makbul du'a orang-orang yang ternaniaya
Ya Allah kau limpahkanlah taufiq dan hidayah kepada pemimpin pemimpin
kami supaya mereka memahami perjuangan yang lebih besar yang mereka
perlu rancang dan harungi.
Thank you for the Eid greetings. Yes its the day to celebrate the
victory over the self which is what Ramadhan is all about. A month of
fast not only from food and drink but the attainment of a higher level
of purity and thankfulness for the countless blessings
bestowed by Allah the Almighty.
Nonetheless it pains many Muslims and I am sure a good number of
concerned non Muslims over what is happening in Syria, Egypt and
Palestine. If we do things in the name of God it cannot be that other
humans must suffer for our acts of worship. It has to be wrong
if fellow humans must suffer in our effort to please God. Lets us
reflect on this important proviso.
Even
with an economics background I am always baffled by the analysis of the
ever so politically correct economic writers. / Walaupun dengan latar
belakang ekonomi saya sentiasa bingung dengan analisis penulis ekonomi
sekarang
Even with an economics background I am always baffled
by the analysis of the ever so politically correct economic writers. The
US flooded the world with green pieces of toilet paper over the recent
years in their so called Quantitative Easing . Then they threatened or
decided to stop further episodes of this craziness and that according to
these politically correct economists spells doom for the rest of the
world, the Malaysian economy not excluded?
I mean, shouldn't
we be celebrating that the US have decided to stop this madness?! It’s
not unlike we flooding small kids with lollipops and suddenly we worry
about their health because we intend to stop giving them another flood
of lollipops?! These writers did not they realised that with QE the US
bought the world's real assets, our palm oil etc, with green pieces of
toilet paper?!! Shouldn't this be their concern instead of worrying the
US will stop further flooding of these green toilet paper?!
The
key to the fall of President Mursi is the fact that Misr is a debt
slave nation / Kunci kepada kejatuhan Presiden Mursi adalah hakikat
bahawa Misr adalah sebuah negara hamba hutang.
The key to the
fall of President Mursi is the fact that Misr is a debt slave nation. A
situation engineered by the Zionists owned World Bank and US
Corporotocracy many ,many years ago. A Corporotocracy is an evil
cooperation between Zionists owned private interests, White House and
International Organizations like the World Bank. In the 1950s and 1960s,
the World Bank through Consultant firms engaging Economic Hitmen preyed
on poor developing countries with a view to turn them into debt slaves
of America ( Read: John Perkins - Confessions of an Economic Hitman).
The job of the Economic Hitmen is to over estimate the electricity needs
of poor undeveloped nations.
An economic system is where economic units interact to
produce the optimal amount of goods and services needed by the economy. A key
factor introduced into economics by Shariah
is the legal maxim, AlGhunm bi AlGhurm meaning rewards comes with risk.
In Islamic muamalat one is not entitled to reward unless one
is willing to expose oneself to risk. This provides a fair formula for the
economic units. and the economy runs on equity instead of debt.
The problem with today’s economy is that we have allowed an
unnatural formula to persist in economic transactions. This is the formula of
debt. Instead of an equity transaction where both parties are exposed to risk
and reward we have accepted a situation where a particular economic unit is
given a special dispensation on risk or where one is spared of all risks.
Soalan Berkaitan Zahid’s Say Blog Posting “Fiat Money and Economic Degradation of Muslims”
Kepada: zaziz@hotmail.com
Dari:
Tarikh: Selasa, 16 Jul 2013 16:11:52 -0700
Subjek: Re: Fiat Money and Economic Degradation of the Muslims
Adakah Perbankan Islam juga mengamal riba dengan nama yang lain?
Dipohon pencerahan
--------------------------------------------
Sdr,
Mereka juga terlibat dengan perbankan rizab pecahan seperti bank-bank konvensional. Perbankan rizab pecahan adalah di mana RM1000 yang anda letakkan di dalam suatu akaun semasa dengan sebuah bank akan dipinjam berkali-kali oleh bank-bank sehingga akhirnya ramai orang memegang buku cek yang mengaku memilikki RM1000 tunai yang anda mula-mula letakkan di bank anda tersebut. Bank boleh berbuat demikian sebab tidak ramai orang yang datang keluarkan tunai; kebanyakkan membuat bayaran dengan buku cek. Mereka tahu lazimnya mereka hanya perlu simpan tunai hanya 10% daripada jumlah keseluruhan buku cek tersebut. Ini kerana itulah jumlah maksima yang biasa dikeluarkan oleh orang dari bank didalam sesuatu masa.
Excellent article by Prof Kameel attached below. Prof Kameel has long been an advocate for the removal of the fiat money system. Fiat money system is one of the most important issues of our lifetime. It is so important that in the last few messages to mankind, the last few verses of the Quran and in the Khutbah Wida' by Rasulullah s.a.w. we are again warned about the dangers of riba, which is what fractional reserve banking is, the mother of all riba! We need to clearly understand Prof Kameel's message. Fighting riba should interest us who worry about the future of our grand children; it should interest us who wish to live life as true Muslims, free of riba: It should worry us who worry about the fate of Palestine and Al-Alqsa; it should worry us who worry about Misr and a host of other debt slaves nations, slaves to nations who are kings of riba ; it should worry us who are Nationalists and worry about the fate of the Malays. I submit if we really do understand, there is no other issue as critical as riba, they just pale in comparison. No other sins Allah and His Rasul declare war on as in riba.
AlBaqarah : 278 & 279
O you who have believed, fear Allah and give up what remains [due to you] of interest, if you should be believers.
And if you do not, then be informed of a war [against you] from Allah and His Messenger. But if you repent, you may have your principal - [thus] you do no wrong, nor are you wronged.
For what higher title do we carry than to be the Vice Regent of Allah on this earth?
" By time, verily Man is in loss except those who believe and do righteous deeds. And reminds one another with truth. And reminds one another with patience." Surah Al-'Asr.
"The person who utters a word which meets with God's favour may think it has not been heard, yet for this word, God will raise him to a higher level of Jannah. Conversely, the person who utters a word that stirs God's anger may give no thought to what he said, only to have God cast him in Hell for seventy years."
(Narrated by Malik and al-Tirmidhi, also by al-Nasa'i and Ibn Majah)
"Dear God You do not burden that I must but win, but You command that I must but try. Dear God count me amongst those who try. Verily my solah, my ibadah, my life and my death is only for You, Master of all Universe. Peace and aching salutations to the love of our life Muhammad s.a.w"
How to convert and become a Muslim with Live Help by 1-to-1 chat
www.IslamReligion.com
Thesis download : "The Negative Impact of Riba Banking on the Performance of Islamic Banking in a Dual System"
http://independent.academia.edu/ZahidAziz
